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Lake Erie Connector Will Connect Ontario to the World’s Largest Electricity Market

TORONTO, Ontario (April 10, 2019) /PRNewswire/ — ITC Holdings Corp. (“ITC”), a Fortis company, today issued its support of the Independent Electricity System Operator’s (“IESO”) recently announced planned changes to the structure of its electricity auctions. 

ITC’s proposed Lake Erie Connector (“LEC”) project will complement the IESO’s efforts to save Ontarians billions of dollars in energy costs by creating a new corridor between Ontario and the U.S. for exporting and importing electricity.

ITC’s proposed LEC transmission project is a 1,000 MW, bi-directional, underwater transmission line utilizing state-of-the-art high-voltage direct current (“HVDC”) technology. The line will provide the first direct electrical link between Ontario and PJM Interconnection, the world’s largest electricity market comprising 13 U.S. Midwestern and Mid-Atlantic states. In 2017 the National Energy Board concluded that the project “would provide benefits to Indigenous, local, regional, and provincial economies, allow greater flexibility for two large energy markets to meet changing energy needs, and increase market efficiency for Ontario and its rate payers.” The planned and fully permitted project will run from Nanticoke, Haldimand County, Ontario, to Erie County, Pennsylvania and is scheduled to be in service by 2023 if commercial agreements can be secured.

“The LEC is unique among any other long-term transmission or generation project planned for Ontario,” said Terry Harvill, President, ITC Grid Development. “The project brings tremendous financial and environmental benefits to the province while reducing costs and increasing system resilience and flexibility. The LEC is the most dynamic energy option for Ontario in terms of providing value to customers.”

Currently, when Ontario has excess power supply, the province does not have the infrastructure in place to export it at a competitive rate, so energy is often wasted (through curtailing wind generators or spilling water instead of generating power) or sold at a significant discount to competitive jurisdictions – costing Ontario jobs and much-needed investment. By connecting to existing on-shore transmission lines, the LEC would enable Ontario to export electricity to new customers and import it when the province needs more energy at a fair rate. It would also help to assure a clean energy mix by reducing GHG emissions in the sector by up to 2-3 million tons per year1.

“The Lake Erie interconnector will prove to be an invaluable strategic asset for Ontario to benefit from enhanced electricity trade,” said Dr. Jatin Nathwani, Professor, Ontario Research Chair and Executive Director at the University of Waterloo’s Institute for Sustainable Energy. “The investment in the interconnector introduces flexibility, provides a solid basis for creation of new economic value and must also be viewed as a positive Ontario contribution to advancing de-carbonization of the electricity mix of our neighbouring states to the south.”

The LEC supports the government’s “Open for Business” mandate by connecting Ontario with the robust PJM market. Along with continued investment in strategic infrastructure and transmission, this transmission line can play a meaningful and impactful role in helping Ontarians save money on electricity by helping to reduce rising costs, generate new trading revenue, and resolve current challenges experienced by the province’s power system.

“Reforming the Ontario electricity system presents a great opportunity for the LEC to become a defined component of Ontario’s economic strategy as the government looks to lower bills, increase trading revenues and economic growth, and reduce its emissions profile,” said Harvill. “The project will maximize efficiency, increase competition, and optimize the ability of the IESO to maximize and build on its intended auction environment as part of market renewal in the province. These benefits will translate into over $100 million per year for decades into the future2.”

About ITC Holdings Corp.
ITC is the largest independent electricity transmission company in the United States. Based in Novi, Michigan, ITC invests in the electric transmission grid to improve reliability, expand access to markets, allow new generating resources to interconnect to its systems and lower the overall cost of delivered energy. Through its regulated operating subsidiaries ITCTransmission, Michigan Electric Transmission Company, ITC Midwest and ITC Great Plains, ITC owns and operates high-voltage transmission infrastructure in Michigan, Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma, and in development in Wisconsin. These systems serve a combined peak load exceeding 26,000 megawatts along approximately 15,800 circuit miles of transmission line, supported by 700 employees and 1,000 contractors across our expanding footprint. ITC Grid Development focuses on growth through regulated infrastructure investment as well as domestic and international expansion through merchant and other commercial development opportunities. For further information visit ITC is a subsidiary of Fortis Inc., a leader in the North American regulated electric and gas utility industry. For further information visit WWW.FORTISINC.COM.

Lake Erie Connector: Benefits to Ontario, The Brattle Group, May 2018
2 ibid